Rethink Priorities

Opinion

Our Position: A Bleak Revenue Forecast Requires State Leaders To Be Responsible Managers.

July 25, 2001|By Fuchsia

Most families know how to manage a budget. They try to spend within their means. When times are good, they may be a little more generous. When times are bad, they cut back, search for creative ways to earn more income.

The state of Florida should be no different. For most of the decade, tax dollars poured into state coffers. Times were good, giving lawmakers and the governor a prime chance to invest in critical state services and even offer a tax break or two. But those days are over.

With each passing day, the state's revenue forecast grows increasingly bleak. A slowing national economy and federal tax cuts partly are to blame. But it's up to lawmakers and the governor to manage responsibly state spending within that dreary framework. And like a family facing a pay cut, that requires some tough decision-making.

Earlier this year, lawmakers and Gov. Jeb Bush made a halfhearted attempt to cut state spending in non-critical areas of government. But they also made some critical errors in judgment -- mistakes that must be rectified to ensure the state's future prosperity.

At the insistence of the governor and House Speaker Tom Feeney, for example, lawmakers this year further reduced the intangibles tax paid mostly by wealthier investors, resulting in a $150 million annual loss to the state. That's like donating a substantial amount of money to a rich aunt but having no cash left over to pay the bills, feed the family and clothe the children. That decision must be revisited if revenues continue to dwindle.

Legislative leaders also approved spending $600 million on programs that had no reasonable prospect for similar financing next year. Imagine borrowing money on a credit card with no ability to repay the debt.

Florida's problems, though, run deeper than a few ill-conceived, politically motivated spending decisions. They stem from the state's over-reliance on sales-tax revenues to fuel Florida's economic engines. When the economy falters, consumers tend to hold onto their money. Discretionary spending and big-ticket purchases are the first to go. That results in reduced sales-tax collections and, as is amply evident, creates a gaping hole in the state budget.

Senate President John McKay at least grasps that elemental concept. He has been touring the state, meeting with special-interest groups and others to gather support for a long-overdue, badly needed overhaul of the state's tax structure. A task force is expected to recommend changes in February, shortly after lawmakers reconvene to tackle redistricting issues.

Lawmakers and the governor can't afford to dismiss those findings. If the economy continues on its current course, it will take more than a nip and a tuck to solve Florida's deepening financial woes. Florida families understand as much. So, too, should the state officials who collect and spend their tax dollars.